Personal income growth in New York nearly flatlined in the first quarter of this year, reflecting the start of the economic shutdown triggered by the coronavirus crisis, according to data released today by the federal Bureau of Economic Analysis (BEA).
Revised BEA data also show New Yorkers’ incomes weren’t exactly roaring upward in the final quarter of 2019, either—a sign that the state economy was weakening even before the pandemic.
This is an installment in a special series of #NYCoronavirus chronicles by Empire Center analysts, focused on New York’s state and local policy response to the coronavirus pandemic.
Incomes on PAUSE
New Yorkers’ seasonally adjusted personal incomes grew by just 0.7 percent during the three months ending March 31, compared to the final quarter of 2019. This was less than one third the U.S. average of 2.3 percent and the third lowest among all states during the same period. Only Hawaii (-0.1 percent) and Michigan (-0.3 percent) had weaker personal income growth than New York in the first quarter.
The number would have looked even worse if Empire State resident incomes hadn’t been propped up by transfer receipts, mainly from Social Security and other government benefits, which increased 8.6 percent, and dividends, interest and rents, which rose 1.6 percent.
New Yorkers’ net earnings—a category including wages, salaries and business proprietors’ incomes—were down 1.6 percent for the quarter. This was consistent with a national pattern in which “earnings increased at the slowest pace since the first quarter of 2013 due to the partial economic shutdown following the outbreak of the COVID-19 pandemic in the first quarter of 2020,” the BEA said.
The nationwide map from BEA, in which pale shading equates to weak growth:
Falling behind
New York’s relative weakness in the first quarter of this year was not surprising given the extreme measures taken by Governor Cuomo to prevent the spread of COVID-19, starting with a shutdown of all normal business and social activity the third week in March. New York’s private job losses since the shutdown also have been especially severe by national standards.
The newly revised BEA data also indicate the state’s economic growth rate was slowing in the run-up to the pandemic. Today’s numbers show New York’s personal income during the fourth quarter of 2019 was just 1.3 percent—among the lowest increases in any state during a period when U.S. average income growth was 3.6 percent.
You may also like
Inflation Trends in the New York Metropolitan Area
Federal data show that prices in the New York metropolitan area are not only high, but rising faster than the national average.
According to the Bureau of Labor Statistics, the Consumer Price Index for the New York–Newark–Jersey City area ro Read More
Albany Should Listen to Jamie Dimon
In his annual message to shareholders, JP Morgan Chase's chief executive, Jamie Dimon, offered a timely and pointed warning for New York policymakers.
It's worth , with emphasis add Read More
Albany Wavers on Shutting Down a Medicaid Racket
As Washington threatens to crack down on fraud and abuse in New York's Medicaid program, state legislators are doing their best to demonstrate why federal intervention is needed.
A Read More
Getting to the Bottom of the 340B Drug Discount Boondoggle
Some of New York's largest and most prosperous hospitals are reporting rapidly growing amounts of revenue from pharmacy sales – most of it apparently flowing from a controversial drug discount program known as 340B. Read More
New York Still Hasn’t Learned from its Covid Mistakes
Today marks the sixth anniversary of a fateful moment in New York's coronavirus pandemic: the Cuomo administration's order sending Covid-infected patients into nursing homes.
Of the Read More
Ideas for Cleaning Up New York Medicaid
As the Trump administration cracks down on fraud, waste and abuse in Medicaid, New York is a logical place to start.
New York spends far more Read More
The Bottom Line of Hochul’s Essential Plan Overhaul
Now that New York has won partial federal approval for overhauling its Essential Plan, it's worth being clear about what the state is doing and why.
The is not primarily about "pre Read More
Emails Conflict with Health Commissioner’s Testimony on CDPAP
The company selected to manage an $11 billion Medicaid home-care program discussed the job in detail with top Health Department officials – and submitted a 46-page takeover plan – two weeks before state lawmakers author Read More